The Human Capital Side of M&A
hiQ Labs has recently entered the mergers and acquisitions (M&A) space with a focus on providing the buyer with a skills footprint and flight risk probabilities for the seller’s workforce. Accordingly, the next several editions of hi5 will be dedicated to M&A resources and best practices.
Today, we are showcasing a Mercer research report that explores the people-related risks and rewards associated with M&A deals. (Link) Based on a series of surveys and interviews with M&A professionals, the report calls attention to the human capital concerns associated with deals. Buyers are not just looking at products, customers, and market access . . . the acquired workforce is also a critical consideration.
With that in mind, here is today’s hi5 - the 5 action items for buyers to keep in mind regarding the human capital side of M&As:
Deal timelines are shrinking as the marketplace for buyers has become significantly more competitive. As such, embedding experienced project management and integration professionals in the process is necessary in order to accelerate decision-making around the integrated workforce.
Uncertainty breeds disengagement. Stave this off by implementing a clear communications strategy throughout the M&A process. Optimal communications are frequent, transparent, and consistent.
Evaluating an acquisition’s talent is difficult - especially in an acquisition sprint! The solution lies in a structured evaluation and breakdown of the skills of the seller’s key employee groups. Unfortunately, internal company data often tells you little about employee competencies; harnessing external data sources is the key.
Once a skills footprint of the seller’s workforce has been established, target your retention programs (e.g., stay bonuses) to key employee segments.
Finally (and as a corollary to #4), research how competitive your reward structure is relative to the market to ensure that top talent is retained.
Please reach out to us with questions and/or suggestions for future editions of hi5 at firstname.lastname@example.org.